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The Yellow Team | April 24, 2023
Yellow invented Less-than-Truckload (LTL) shipping as a way of giving customers more flexibility and options for moving freight. Although LTL shipping has been around in some form for nearly a hundred years, many shippers are still unsure of what it really is.
Less-than-truckload handles relatively small freight shipments, generally weighing between 100 and 20,000 lbs., that do not take up a full trailer. Carriers that specialize in LTL consolidate these shipments into their freight systems. Utilizing expansive networks of pick-up and delivery operations, these shipments are moved between origin and destination using a hub-and-spoke configuration of freight terminals where consolidation and deconsolidation of the shipments occur. Today, tens of thousands of shipments can move through a complex, national LTL network at any given time.
Yellow’s origin as a trucking carrier goes back to the 1920s, when founder A.J. Harrell opened a freight terminal in Oklahoma City, and soon created one of the first freight transfer systems, moving shipments between Oklahoma and Texas. The company has offered LTL to its customers throughout its history, but LTL became an even larger portion of Yellow’s shipping tonnage after 1980, when the trucking industry was deregulated by the federal Motor Carrier Act and provided shippers with more options on carriers, price and trucking modes. Today, Yellow is among the country’s largest LTL carriers.
Depending on the distance shipped, LTL carriers are often classified into one of three sub-groups:
Regional - Average distance of shipments is typically fewer than 500 miles with a focus on one- and two-day delivery times. Regional LTL companies can move shipments directly to their respective destination centers, which increases service reliability and avoids costs associated with intermediate handling.
Super-Regional - Average distance of shipments is usually between 500 and 1,000 miles, with a focus on two- and three-day delivery times. There is a competitive overlap between regional and national LTL providers in this category, as each group sees the super-regional segment as a growth opportunity, and few providers focus exclusively on this sector. Super-regional services generally provide customers with improved speed in transit, limited handling (which often reduces damages and shortages) and improved timing on pick-ups and deliveries. These services also enable customers to keep their shipment sizes smaller, which can assist in trimming inventory carrying costs. Yellow is currently transforming its operations into a super-regional LTL network.
National – The average route distance is typically more than 1,000 miles, with a focus on two- to five-day delivery times. National providers rely on intermediate shipment handling through a network of facilities, which require numerous satellite service centers, multiple distribution centers and a relay network (locations where trailers are exchanged between tractors, allowing drivers to maximize their hours of service). To gain service and cost advantages, national LTL carriers often ship directly between service centers, minimizing intermediate handling.
One of the advantages of using LTL is that shippers pay for the portion of the truck that shipments occupy, instead of paying for the full truck as in the case of full truckload (TL) shipping. This can reduce the overall cost of shipping for customers and increase their operating margins, as opposed to other trucking modes in which shippers must hire a full asset.
Shippers that use LTL also can choose from a wide range of shipping options, ranging from sophisticated expedited ground shipping solutions to a blended form of shipping where LTL plays a critical role in moving freight that touches multiple shipping modes.
By keeping shipment sizes smaller, the transition between modes is more fluid and the range of options increases. For example, a pallet of office supply equipment can be moved between full semi-trailer loads to smaller, more versatile sprinter vans; whatever it takes to get the shipment to a destination on time and factory-fresh.
Other options available to LTL shippers include liftgate services, inside pick-up and delivery, set-up and repackaging, and many other premium, “white glove” service options.
Less-than-truckload continues to gain popularity as supply chain velocity gets faster, transit distances get shorter and demands from consumers become greater. The continuous rise of e-commerce is also a driving force pushing LTL networks to become faster and more efficient. The traditional LTL industry was estimated to be a $50.7 billion market in 2022 and is expected to grow to $56 billion by 2027, according to Armada Corporate Intelligence.
Yellow was an original innovator in LTL and has one of the most extensive LTL networks in the country. We are building upon this legacy of innovation by completing our One Yellow super-regional network transformation that will bring customers the advantages of high-speed inter-regional service. Blended with one of the broadest service portfolios in the industry, Yellow will provide shippers with a wide array of service options that will help them fully optimize their supply chain efficiency.
To learn more about Yellow and the LTL services we provide, click here.
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